What tax rate are you indifferent between the investments

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Reference no: EM131958567

1. You are choosing between a fully taxable investment with a before-tax yield of 5% and a municipal bond with a yield of 3.9%. At what tax rate are you indifferent between the investments?

2. Why is the payback period considered to be an inferior method as compared with the others?

3. A treasury bill with a $10,000 face value and 360 days to maturity is quoted with bid and asked discounts of 1.2% and 1.18%, respectively. What is the bond equivalent yield on the T-bill?

Reference no: EM131958567

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